Silicon Valley Bank crisis: Staff offered 45 days of work at 1.5x salary by FDIC
2 min read . Updated: 11 Mar 2023, 09:52 PM IST
PremiumStaffers have been told to continue working remotely - except for essential workers and branch employees. They will be enrolled and given information about benefits over the weekend. Healthcare details will be provided by the former parent company SVB Financial Group.
Days after the Silicon Valley Bank crash sent shockwaves across the globe, employees have reportedly been offered 45 days of employment at 1.5 times their salary. The development came after the Federal Deposit Insurance Corp took control of the collapsed lender on Friday.
According to a staff email seen by news agency Reuters, staffers have been told to continue working remotely - except for essential workers and branch employees.
Workers will be enrolled and given information about benefits over the weekend by the FDIC, and healthcare details will be provided by SVB Financial Group, FDIC wrote in an email late Friday entitled ‘Employee Retention’ reported Reuters.
Silicon Valley Bank had a workforce of 8,528 at the end of last year. SVB ranked as the 16th biggest bank in the U.S. at the end of last year, with about $209 billion in assets and $175.4 billion in deposits.
Earlier this week, US banking giant Silicon Valley imploded as patrons rushed to withdraw their deposits amid growing concern about the lender's health. The frenetic two-day run has sent shockwaves rippling across the globe and wiped out more than $100 billion in market value for US banks.
Regulators rushed Friday to seize the assets of one of Silicon Valley's top banks, marking the largest failure of a US financial institution since the height of the financial crisis almost 15 years ago.
As part of the seizure, California bank regulators and the FDIC transferred the bank's assets to a newly created institution – the Deposit Insurance Bank of Santa Clara.
The new bank will start paying out insured deposits on Monday. Then the FDIC and California regulators plan to sell off the rest of the assets to make other depositors whole.
There was unease in the banking sector all week, with shares tumbling by double digits. Then reports of SVB's distress pushed shares of almost all financial institutions even lower Friday.
Its downfall is the largest failure of a financial institution since Washington Mutual collapsed at the height of the financial crisis more than a decade ago. The aftereffects are already being felt, with some startups scrambling to pay their workers and meet office expenses. This in turn could lead to furloughs or layoffs.